First home scheme takes off after a short delay: 148 loans in first month

After more than a month since the “First Home” scheme should have kicked off, the 19 lenders who made public their participation in the scheme haven’t yet signed all the required conventions. Aurel Saramet, chairman and managing director of National Credit Guarantee Trust (FNGCIMM), outlined to Wall-Street the current situation of “First Home” program.

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17 banks of the 19 who expressed interest in the scheme, signed the conventions

Until mid this week, a month since the First Home scheme should have been up and running, only 17 banks signed the necessary conventions with the Small-Business National Credit Guarantee Trust.

“Until last night (e.n – August 4), 17 banks signed the conventions with the Trust and were authorized to disburse loans under the scheme, and the remaining two are due to sign the papers soon”, Aurel Saramet, chairman and managing director of FNGCIMM, told Wall-Street.

Initially, 20 banks expressed interest in participating in the government’s stimulus measure. But later on,ING Bank pulled outon discordances with the provisions set forth in the conventions. ING Bank said it would soon launch a lending product similar to those under the scheme.Guarantee fund approved 148 applications, 30 pending

Although a number of lenders said the number of “First Home” loan applications has risen sharply, the Guarantee Trust received only 178.

“Up to now, we received 178 applications for state guarantee for loans under the scheme, of which 148 were approved and 30 are still pending”, said Aurel Saramet.

If in the 148 applications submitted, the clients had requested the maximum guarantee, of 60,000 euros, the Trust would have already exhausted 8.88 million euros of the total government stimulus of 1bn euros.

Why did banks refuse to sign the convention?

The first bank that disbursed a loan under the scheme was BRD – Groupe Societe Generale, one of the lenders that earmarked a ceiling of 171 million euros for this type of mortgages.

Banca Comerciala Romana, Romania’s largest bank and the bank who earmarked the highest lending ceiling (308 mn euros), joined the scheme later and began disbursing loans no sooner than this month.

Both BCR and other credit institutions refused to sign the guarantee conventions until the Government expressed clearly the provisions set forth in the convention.